Tag: Wagering

Thoroughbred Racing Economic Indicators for August Announced

Editor’s Note: As a service to the industry and in consideration of the economic changes due to the COVID-19 outbreak, Equibase is currently providing monthly reporting of its Economic Indicators Advisories. The Advisory is typically disseminated on a quarterly basis to provide key metrics used to measure racing’s performance throughout the year.

* Includes worldwide commingled wagering on U.S. races.

August 2020 vs. August 2019

Indicator                                              August 2020         August 2019             % Change

Wagering on U.S. Races*                  $1,154,522,663     $1,177,165,980          -1.92%

U.S. Purses                                        $104,515,752        $128,293,370             -18.53%

U.S. Race Days                                  445                       515                             -13.59%

U.S. Races                                         3,607                    4,026                           -10.41%

U.S. Starts                                         26,964                  28,895                         -6.68%

Average Field Size                            7.48                      7.18                             +4.16%

Average Wagering Per Race Day    $2,594,433         $2,285,759                    +13.50%

Average Purses Per Race Day        $234,867            $249,113                        -5.72%

 

YTD 2020 vs. YTD 2019

Indicator                                                 YTD 2020                   YTD 2019           % Change

Wagering on U.S. Races*                      $7,308,988,910        $7,792,183,885      -6.20%

U.S. Purses                                             $518,901,054           $775,638,076         -33.10%

U.S. Race Days                                       2,144                        3,103                      -30.91%

U.S. Races                                              17,793                      25,225                    -29.46%

U.S. Starts                                              140,022                    185,746                   -24.62%

Average Field Size                                 7.87                          7.36                         +6.87%

Average Wagering Per Race Day         $3,409,043               $2,511,178               +35.75%

Average Purses Per Race Day             $242,025                  $249,964                  -3.18%

The post Thoroughbred Racing Economic Indicators for August Announced appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Thoroughbred Idea Foundation: Jackpot Wagers Are Bad For Racing

Churchill Downs is the center of racing this weekend as the 2020 Kentucky Derby is finally contested at the famed Louisville track in a year that has been unlike almost any other in modern memory.

Among the special bets available across the two days is the Oaks/Derby Pick Six, which carries a $2 minimum investment, a mandatory payout and a low 15% takeout.

This special bet harkens back to what has seemingly become a bygone era – where pick six bets carried $2 minimums and were absent any jackpot provisions. The twist, of course, is that six graded races across the two days comprise this bet, the Alysheba, La Troienne and Kentucky Oaks on Friday, followed by the Derby City Distaff, Old Forester Turf Classic and Kentucky Derby on Saturday.

Horseplayers have grown both weary of, and disdainful at, the proliferation of jackpot bets – be them pick fives, pick sixes, or other iterations of wagers where a portion of every daily wager is retained for a jackpot paid on the occasion where there is only one individual winning ticket, while another portion is used as a “minor pool” which the multiple ticket winners for the day share.

For customers to really understand the pricing on these bets, it often takes more than just a cursory glance at a number – the takeout – to grasp the impact. Are players betting them? Sure. But, as outlined in our recent report, “Racing Not Only For (the) Elite,” an increasing number of these bets seem to be won by computer-driven high-volume bettors chasing jackpots with massive investments. Last Sunday at Del Mar, a $36,722 investment from a “single” player landed the jackpot of $686,660.

JACKPOT DECEPTION

Jackpot bets are tricky. They deceive.

For now, horse racing wagering in America is presented as almost exclusively a pari-mutuel. The sport earns a guaranteed cut on wagers, and should want as much wagering as possible. In jackpot bets, an amount of every wager is retained and paid to only one customer on the occurrence of that single customer having the only winning ticket in a particular bet.

There may be a belief that jackpot bets drive attention, because horseplayers are always able to shoot for some big carryover or, in the event the bet is not hit for a prolonged period and “forced-out,” wagering on a particular day will be outsized as horseplayers seek to claim the money they know they have a much better chance of winning.

By adding an artificial provision – the single ticket requirement to pay the jackpot – tracks have effectively limited overall wagering churn on other races and greatly increased the takeout on those “lucky” enough to have a winning ticket good enough for only the day's minor pool payout. A segment of informed horseplayers question the long-term, detrimental effects of offering bets where very few customers ever win. Their concerns are well-founded.

A paper from the March 2020 edition of Contemporary Economic Policy offers horse racing some potential lessons as to the long-term impact of actions similar to the proliferation of the jackpot bets in racing. Levi Perez, associate professor of economics in Spain's University of Oviedo and Ph.D candidate Alejandro Diaz are the authors of “Setting The Odds Of Winning The Jackpot: On The Economics of (Re) Designing Lottery Games.”

In the paper, Perez and Diaz contend that customer behavior in light of bigger jackpots, combined with reduced chances of winning a popular Spanish lottery game, changed outcomes for the negative.

“Bigger jackpots no longer translate into higher sales but rather the opposite: it is quite common for the same jackpot size to currently produce lower sales than before [the odds were substantially increased]” in the Spanish lottery game, La Primitiva.

“Players,” they say, “have now become less sensitive” to the jackpots.

This is no surprise to economists.

In racing, the awareness of the customer to their own sensitivity can be masked, as tracks market jackpot bets with one takeout rate, but realistically, charge daily winning customers a different, effective rate. Those who might have picked six winners in a day, but weren't the only ticket, experience a rate that is, in some cases, more than four times higher than the published rate.

WOULD COMMISSIONS APPROVE A BET WITH TAKEOUT AT 62.5%?

Unquestionably, Churchill's Single 6 is the best of the jackpot bets from a pricing standpoint, offering a daily effective takeout of just 23.5%, still significantly lower than even some traditional bets – like a trifecta at Penn National which carries an absurd 31% rake. Below is a sample of several jackpot bets that exist today. It should be clear not all jackpot bets are the same.

If $100,000 is bet into the Single 6 today, and it has a 15% takeout, the net pool is now at $85,000. If there are multiple winning combinations on the six-race sequence, the bet carries a provision that 90% of the net pool goes to any daily winners with all six winning horses and 10% goes each day to the jackpot. That means $76,500 is returned to winners and $8,500 goes to the jackpot.

For this given day, with $76,500 returned from an initial investment of $100,000, the effective takeout is 23.5%.

On the other end of the spectrum, a bet like Assiniboia's Jackpot Pick 5 is just ridiculous.

Picking five winners is, obviously, easier than picking six. That also means that having a single winning ticket for five winners becomes an almost impossible task. In fact, it hasn't happened once in 2020, through 45 days of racing. On two of those days, the jackpot was forced out, releasing the built-up carryover to any customer that picked five winners that night. But for the other 43 days, anyone with all five winners paid an effective takeout of 62.5%. Would a racing commission approve a bet with this high of a daily, effective takeout if they knew this to be the reality?

Promoting such bet-types beyond more traditional plays is pushing customers into bets with incredibly slim chances of winning, and when they do, but others do too, the return is significantly smaller than expected.

But “racing” benefits when customers churn winnings into subsequent bets – jackpot bets reduce overall churn. MANY people winning is good for racing, in the short and the long term. Customers respond on days when they know that a jackpot is being paid out – with days, weeks or even months of money which has been held is finally released. On these occasional days, effective takeout paid by winners is much lower than the published rate.

Here is the takeaway message: jackpot bets are bad for horse racing.

While jackpot bets might sporadically create intense participation from customers on days when the jackpot is “forced-out”, their widespread presence is, on the whole, detrimental to the greater sport.

There are many bettors who know this, and might find it laughable that some still don't.

Granted, not all jackpot bets are the same, but customers should stay attentive to the splits on each bet and the effective takeout (which is not published by the track) and compare it to the actual takeout rate (which is published). Tracks have made generally bad decisions for the greater business in last two decades – the proof is, unarguably, in the numbers.

Overall wagering on racing is not only down, but the composition of that handle is substantially different – play from a small number of heavily-rebated, computer-assisted bettors who can transmit their bets direct to the pools, bypassing traditional ADW setups, is up an estimated 114% in the last 16 years. Meanwhile, play from all other customers – the vast majority of them – is down an estimated 63% adjusted for inflation in the same period.

The two-day, Oaks/Derby Pick 6 with a $2 minimum and 15% takeout is a throwback to well…not all that long ago. It's a decent bet, engaging and “good” for racing. Churchill's own jackpot pick six is one of the “best” of a very troubling lot of jackpot bets, with a daily effective takeout of just 23.5%.

But if faced with an option, as you are on these Oaks/Derby days, it is worth supporting the lower takeout pick six.

For all the discussion around these last few months being a great time for racing to attract new players, we can't think of anything worse than new players being attracted and pushed towards churn-killing jackpot bets.

As racing enjoys a strange edition of one of its premier events, customers who still enjoy having a bet on racing should be provided with greater transparency on the prices they are really paying (takeout) when winning. Racing – including horsemen – cannot afford to continue treating a large segment of customers so poorly.

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Equibase Analysis: Ny Traffic Top Chance To Upset Derby Favorite Tiz The Law

The long awaited 146th running of the Grade 1, $3 million Kentucky Derby presented by Woodford Reserve drew 17 horses, and Tiz the Law, for a total of 18. The reason Tiz the Law is separated from the rest is his body of work this spring and summer has been nothing short of phenomenal. Winning all four races he has run in 2020, Tiz the Law is the only horse in the field to have won at the Derby distance of one mile and one-quarter. That win came in the Travers Stakes last month in as workmanlike a fashion as I've ever seen. The one-eyed and aptly named Finnick the Fierce is the only one of the other 17 that has ever finished in front of Tiz the Law. That occurred in the Grade 2 Kentucky Jockey Club Stakes last November when Finnick the Fierce finished second and Tiz the Law finished third. Since then, Finnick the Fierce has run well on occasion without winning, with the best of those efforts coming when third in the Grade 1 Arkansas Derby in May.

Of the rest, Tiz the Law has already beaten Max Player, Sole Volante and South Bend. Max Player won the Grade 3 Withers Stakes in February but has been beaten by an average of six lengths in two tries vs Tiz the Law since then. Sole Volante was sixth behind Tiz the Law in the Belmont Stakes in June but he did win the Grade 3 Sam F. Davis Stakes in February and is one of just a few in the field with breeding to run the 10 furlong trip successfully. South Bend was a late entrant into this race after some withdrawals earlier in the week. His last win came last October at Churchill Downs in the Street Sense Stakes but he's winless in nine races since then. Authentic and Ny Traffic are likely to offer bettors who want to find potential value just that. Authentic just won the Grade 1 Haskell Stakes by a nose over Ny Traffic. Prior to that, Honor A.P. beat Authentic in the Grade 1 Santa Anita Derby, before Honor A.P. was himself beaten by Thousand Words in the Shared Belief Stakes last month at Del Mar. Attachment Rate is another horse who has been doing okay at the level particularly when second behind Art Collector (who was not entered due to a slight injury this week) in the Ellis Park Derby last month. Money Moves has never run in a stakes race but he's a very lightly raced colt coming into the race off a career-best effort and has the breeding to run this far. Necker Island finished five lengths behind Attachment Rate in the Ellis Park Derby, the same position he finished in the Grade 3 Indiana Derby prior to that. Major Fed was the runner-up in the Indiana Derby, the same position he finished in the Grade 2 Risen Star Stakes in February. King Guillermo is another who ran well earlier this year in the division, first when posting the 49 to 1 upset in the Grade 2 Tampa Bay Derby then when second in the Arkansas Derby in May. Storm the Court, who posted the 45 to 1 upset last fall in the Grade 1 Breeders' Cup Juvenile, moves back to dirt after a runner-up finish in the Grade 3 La Jolla Stakes and may be able be competitive in this situation. Enforceable, Mr. Big News and Winning Impression round out the field, the first two entering off a non-threatening fourth and sixth place finishes, respectively, in the Blue Grass Stakes and the latter off a seventh place effort in the Ellis Park Derby.

It is very difficult to envision Tiz the Law not winning this year's Kentucky Derby. In normal years when the Derby is run in May, there may be a number of horses who are on patterns of improvement enough to give the likely favorite a run for his money. That is not the case this year, as Tiz the Law has run consistently fast in all four starts since making his first start as a three year old in February. Starting with the Holy Bull Stakes, Tiz the Law earned a 117  Equibase Speed Figure which is unheard of for a three year old in the winter. Nearly two months later the colt put in another display to win the Florida Derby with a 112 figure, then nearly two months later he ran similarly well with a 113 figure as he dominated the field by nearly four lengths in the Belmont Stakes. Running the mile and one-quarter distance of the Derby last month in the Travers Stakes, Tiz the Law was even more impressive, making a move on the turn to go from third to first by with half-length margin, then asserting himself to win by five and one-half lengths as he was eased up in the final yards having done the job and still saving something for this race. That effort earned a 115 figure. This is an incredibly gifted equine athlete who wants to win and can back up the desire with immense talent. He's also seasoned, having beaten 29 horses in his four starts this year. Likely to be stalking likely early leader Authentic and a couple of others going into the far turn, when jockey Manny Franco asks Tiz the Law for his usual burst of speed, it is unlikely any horse will have any response worthy of challenging the colt in the last eighth of a mile.

That being said, there are horses who can run well, some very well, who appear to have a better probability to finish second than may be indicated by high odds. In the unlikely event Tiz the Law falters, one of these horses can post the upset win. Ny Traffic is the first of that group. The first time he stretched out to two-turns, in January and in his fifth career start, Ny Traffic won impressively by six and one-half lengths. Following that the colt finished third in the Risen Star Stakes, second in the Louisiana Derby, second in the Matt Winn Stakes and second in the Haskell Stakes. His Haskell effort yielded a career-best 109  Figure and showed he might enjoy the mile and one-quarter distance in the Derby even more than the mile and one-eighth distance at which he was gaining ground on winner Authentic with every stride at the end. In the Haskell, Authentic was drawn inside Ny Traffic, allowing that one to get the lead from the start. In the Derby, Authentic is drawn on the far outside, and there are more than a few horse who may try to deny him the lead. If jockey Paco Lopez can put Ny Traffic into a stalking position while not going too wide into the first turn, this colt has a big shot to be second or third at high odds.

Money Moves is the most lightly raced horse in this year's Derby field, having run just three times. However, he may have the quality to compete favorably in this field. After winning the first two starts of his career in February and March, both around one turn, Money Moves stretched out to a mile and one-eighth at the end of July and faced older and more mature horses. Nevertheless, he showed ability and maturity, rallying to miss winning by a neck with a 109 figure. Housed in the top barn of Todd Pletcher and by Candy Ride, who produced multiple stakes winner Gun Runner, Money Moves is another who figures to be in the mid-pack early. Any continued improvement off that stakes quality effort and figure in his last race makes Money Moves another horse that can be in the top three at the least.

Sole Volante is one of just a few in this field who should not find the 10 furlongs of the Derby beyond his reach. We already know Tiz the Law has handled the trip so there are no concerns there. Before a very poor sixth place finish behind Tiz the Law in the Belmont Stakes, Sole Volante was first or second in three straight stakes on dirt, including a powerful effort in the Sam F. Davis Stakes in which he rallied from 15 lengths back to win by two and one-half lengths at the end. That effort earned a 108 figure as good as the 109 Ny Traffic and Authentic earned in the Haskell and those two should be much lower odds than Sole Volante. I am willing to ignore his poor recent Belmont Stakes effort, particularly since Sole Volante has put in three superb workouts – two at one mile and the last a sizzling five furlong drill on grass. The reason I think Sole Volante will have the stamina to successful contest the classic distance of 10 furlongs is because his dam (Light Blow), not only is by Kingmambo, who could run all day, but because she produced a horse that lost by a neck in a stakes race the only time he ran a mile and one quarter. On the other hand, Sole Volante likes to come from far back, so navigating past 15 to 17 other runners in the last quarter mile may be difficult.

Next, there are three more just outside the bubble of what I consider the most likely horse to win (Tiz the Law) and a trio who can finish second – Honor A. P., Thousand Words and Authentic. The reason mostly is because they've taken turns beating each other, with none of the three asserting himself in the process. Combined with posts which could be problematic given that they all have tactical speed that means they will have to be as lucky as they are good to run well. Honor A. P. has never been worse than second in five races, but he doesn't have the quick burst like Tiz the Law does and will need horses to come back to him in the late stages to succeed. Beaten by Authentic in the San Felipe Stakes in March with a 101 figure, Honor A. P. turned the tables on Authentic in the Santa Anita Derby with a 105 figure effort then was unable to mount the same rally last month in the Shared Belief Stakes, won by Thousand Words, although Honor A.P. did improve slightly to a 106 figure. Thousand Words had won the Robert B. Lewis Stakes in February with a career-best 107 figure, then regressed badly when fourth in the San Felipe. Even ignoring his poor effort over a sloppy track in the Oaklawn Stakes in April, he was no match for Uncle Chuck in the Los Alamitos Derby (92 figure). Rebounding to winning form in the Shared Belief with a 107 figure, that was a race in which Thousand Words led from start to finish, an unlikely scenario in the Derby with need-the-lead type Authentic also in the race. Authentic earned a career-best 109 figure in the Haskell, but that was earned leading from start to finish and it appears likely the colt will have to expend a good deal of energy getting past 17 other horses before the first turn to get the lead he likes. That early effort could be problematic in the last eighth of a mile when stalkers like Tiz the Law, Money Moves and Ny Traffic start to pick up steam, as does deep closer Sole Volante.

The rest of the Kentucky Derby field, with their best  Equibase Speed Figures is Attachment Rate (99), Enforceable (97), Finnick the Fierce (99), King Guillermo (110), Mr. Big News (96), Major Fed (96), Max Player (105), Necker Island (91), South Bend (103), Storm the Court (106) and Winning Impression (92).

Win contender:
Tiz The Law

Horses which can finish second and third, having a chance to win if the Tiz the Law does not fire, in preference order:
Ny Traffic
Money Moves
Sole Volante
Honor A. P.
Thousand Words
Authentic

You can get Ellis' full card detailed analysis and betting recommendations for all the races at Churchill Downs on Derby Day, Saturday May 4, at Equibase.com, TrackMaster.com and most online wagering sites.

Kentucky Derby presented by Woodford Reserve – Grade 1
Race 14 at Churchill Downs
Saturday, September 5 – Post Time 7:01 PM E.T.
One Mile and One Quarter
For Three Year Olds
Purse: $3 Million
TV: NBC 2:30 – 7:30 PM ET

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Full Fields, $100,000 Guarantee In Friday’s Stronach 5

Races from Laurel Park, Gulfstream Park and Golden Gate Fields along with a $100,000 guaranteed pool highlight Friday's popular Stronach 5.

The Stronach 5, with an industry-low 12-percent takeout, will also feature three turf races.

Friday's Stronach 5 begins at Laurel with races seven and eighth. Race seven has 10 maidens 3-year-olds and up going six furlongs while the eighth race features allowance fillies and mares sprinting 5 ½ furlongs on the Exceller Turf Course.

After a claiming event over a 1 1/16 mile turf course at Gulfstream and a mile claiming event on Golden Gate's all-weather surface, the Stronach 5 wraps up with a return to Laurel and the ninth race, a mile event on the Bowl Game Turf Course.

Friday's races and sequence

· Leg One – Laurel Park 7th Race: (10 entries, 6 furlongs) 4:05 ET, 1:05 PT

· Leg Two –Laurel Park 8th Race: (9 entries, 5 ½ furlongs turf) 4:40 ET, 1:40 PT

· Leg Three –Gulfstream Park 10th Race: (12 entries, 1 1/16-mile turf) 5:01 ET, 2:01 PT

· Leg Four –Golden Gate Fields 2nd Race: (10 entries, 1mile) 5:15 ET, 2:15 PT

· Leg Five –Laurel Park 9th race: (10 entries, 1-mile turf) 5:22 ET, 2:22 PT

Fans can watch and wager on the action at 1/ST.COM/BET as well as stream all the action in English and Spanish at LaurelPark.com, SantaAnita.com, GulfstreamPark.com, and GoldenGateFields.com.

The Stronach 5 In the Money podcast, hosted by Jonathan Kinchen and Peter Thomas Fornatale, will be posted by 2 p.m. Thursday at InTheMoneyPodcast.com and will be available on iTunes and other major podcast distributors

The minimum wager on the multi-race, multi-track Stronach 5 is $1. If there are no tickets with five winners, the entire pool will be carried over to the next Friday.

If a change in racing surface is made after the wagering closes, each selection on any ticket will be considered a winning selection. If a betting interest is scratched, that selection will be substituted with the favorite in the win pool when wagering closes.

The Maryland Jockey Club serves as host of the Stronach 5.

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